Southern Power cancels plans for gas-fired power plant

January 23, 2018
Shale Play

DANVILLE, Va. (AP) - Developers have scrapped plans to build a natural-gas-fired power plant in Virginia, a project local officials had hoped could boost the area's economy.

Southern Power recently informed state and local officials it no longer intends to move forward with the plant at the Berry Hill Industrial Park in Pittsylvania County, near the North Carolina border. The project, first announced in 2016, was in the early stages of development.

The subsidiary of Atlanta-based energy giant Southern Company sent a letter to the Danville-Pittsylvania Regional Industrial Facility Authority, which owns the industrial park, informing them of the decision.

The letter said "current market conditions" in PJM Interconnection - which operates the electric grid in the District of Columbia and 13 states, including Virginia - "have limited our ability to execute long-term customer opportunities that align with our business model."

The news was first reported by the Danville Register & Bee.

Pittsylvania County Economic Development Director Matt Rowe told the newspaper the letter from Southern Power speaks for itself.

"We did everything we could do to facilitate their due diligence for the project, but mega projects like this depend on a larger macro-economic and market conditions," he said.

Neither Rowe nor other local economic development officials responded to phone or email messages from The Associated Press seeking comment.

Southern Power announced in 2016 that it had signed a purchase-and-sale agreement option for 300 acres (120 hectares) of land at the industrial park that would be used for a generating facility.

"This project has the potential to represent the largest single private investment ever in Pittsylvania County," Jessie Barksdale, then-chairman of both the Regional Industrial Facility Authority and Pittsylvania County Board of Supervisors, said at the time.

The city of Danville said in a news release that the project could result in an investment of more than $250 million.

State Sen. Frank Ruff, whose district includes Pittsylvania County, said Monday that he's disappointed but doesn't think the state could have done anything differently.

The company had not reached the stage of applying to the State Corporation Commission to construct and operate the facility, SCC spokesman Ken Schrad said.

Southern Power had submitted an application to the Virginia Department of Environmental Quality for an air permit, but hadn't completed the process, agency spokeswoman Ann Regn said.

The company sent a letter Jan. 4 to the agency asking to withdraw the permit application.



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